Gaming is one of the web3 industry’s fastest growing sub-sectors and most resilient verticals, with funding holding up despite the ongoing bear market. More than 60% of the $7.1 billion raised by web3 startups in 2022 went to web3 gaming. And 2023 looks set to be the year this capital gets right, with a Cambrian explosion of high-quality games and another level of adoption.
But for web3 games to truly gain critical mass and unlock their full potential, they must overcome one of their greatest technical challenges to date: scaling.
Fortunately, the idea that web3 games cannot be scaled for mass adoption is rapidly changing with the development of Zero-Knowledge (ZK) technology. In addition to scaling, the introduction of this revolutionary technology brings numerous gaming-changing transformations, including enhanced security, privacy protection, enhanced game mechanics, reliable gameplay, and new revenue streams.
True ownership hits the wall of scalability
Today, robust in-game economies are an increasingly important part of popular AAA titles such as League of Legends, Fortnite, Call of Duty, Overwatch, World of Warcraft, and countless others. As has been repeatedly proven, there is a steady demand for in-game customization, exemplified by the rise of the skins market a $50 billion industry in 2022.
Unable to satisfy the hunger for such items, game developers provide many in-game resources ranging from character and weapon skins to small virtual accessories and avatar frames. Consequently, many players own dozens, hundreds, or even thousands of in-game items, usually scattered across several titles – all of which they can never actually own, sell, or trade.
Traditional web2 gaming assets have always been a one-way street, where money flows from gamers to developers and publishers. This is one of the biggest web2 anachronisms that web3 is trying to disrupt – by opening up in-game economies and allowing players to become full participants in these markets, allowing them to use those custom digital assets between different games, making gaming an interoperable , immersive ecosystem.
However, for this to happen, web3 gaming needs to be prepared to maintain the same scale that web2 titles currently operate on, and that’s no easy task. Giants like League of Legends and Fortnite attract millions and millions of players, and each can have countless in-game items on their account. To compete with such a massive stream of in-game assets, especially when players can actually own them and freely trade and exchange them with each other, web3 games must be able to handle tens of thousands of transactions simultaneously.
Meanwhile, Ethereum, the go-to blockchain for all things web3, can only process an average of up to 30 transactions per second (TPS) today – and that’s a problem.
For ZK, scaling up is just the beginning
Fortunately, a fundamental paradigm shift is already underway. The development and imminent launch of ZK technology natively compatible with Ethereum will change the way all game development, not just web3, is made. dubbed zkEVMthis innovative package brings all the benefits of asset ownership to users on a global scale, while also unlocking a wide range of enhancements that will revolutionize web3 gaming.
First of all, scalability. One of the key benefits of zkEVM technology is the ability to achieve global scale without sacrificing security. It allows large batches of transactions to be bundled and validated off-chain, sending only the final proof to the main network, reducing burdensome transaction data on the main network.
This increases throughput by about 600x compared to the Ethereum mainnet while significantly reducing costs. This functionality is essential in games where millions of high volumes and cheap transactions take place every day.
Then interoperability. Rather than being isolated walled gardens, these new titles will operate more like an ecosystem. Assets, avatars, profiles and more can move seamlessly across platforms and games, providing users with greater liquidity and access.
In addition, the process of buying, selling or transferring items is streamlined to just one or two clicks instead of having to set up and manage a completely separate wallet application. This overarching compatibility means that all titles and services can now seamlessly interoperate in ways never before possible with traditional gaming.
Building interoperable resources to transfer between games is an incredibly compelling way to extend the life of the underlying economic value of game titles. It helps developers create a composable game universe where every fan can enjoy one game quite literally has “skin in the game” for others in the same universe. Not only does this create the opportunity for long-term monetization, but perhaps more importantly, it gives game developers the chance to take more creative risks, knowing that there’s already an audience that will pick up on the game.
Another benefit is the way ZK can improve gameplay and usability. In particular, zkEVMs enable smart contract compatibility, unlocking more advanced gameplay mechanics and vibrant economies within the Ethereum ecosystem.
Functionality such as asset staking offers the possibility of passive income and can add real value to the items acquired in a game. In addition, crafting new items takes on new meaning when they come as an NFT that the player actually owns and can be traded or transferred as they see fit.
In addition, all assets can be nested. For example, a player’s avatar can be an NFT with multiple accessory NFTs. These assets can be linked and transported or sold together, or they can be broken down into their component parts. It’s entirely up to the player.
There are also some great benefits for developers. By using a zkEVM and drawing from a library of vetted smart contracts, the development process can be significantly streamlined, costs saved, and creators can focus on the fun gameplay elements that differentiate their product. You don’t have to reinvent the wheel; any studio can quickly start developing innovative web3 titles.
This technology even makes games safer than ever before. zkEVMs not only increase transaction throughput and reduce costs, but they also maintain the robust security and decentralization of Ethereum.
In addition, using ZK-powered IDs or gamertags means that only the person connected to the account can interact with it. Exploitative or malicious activities can be monitored and addressed without even revealing the real identities or details of those involved. This means overhauling how moderation is handled, ultimately making these environments safer for everyone.
The future is already here
zkEVMs are already being developedand every game studio can now take advantage of the benefits of this technology.
Whatever the need, there are now web3 tools up to the task of bringing the most advanced and powerful experiences to gamers around the world. Developers are no longer shackled by restrictions and can really bring their creative visions to life.